Green Finance Certification Scheme - Green Fund
Respond to Stakeholders’ Needs and Raise Awareness of
Green Initiatives in the Fund Market
Although different investment industry stakeholders have been responding to the rising global demand to incorporate green or environmental, social and governance (ESG) objectives into financial products so that capital would be directed to projects or companies that bring positive impact, there are still issues related to consistency, transparency and sufficiency of disclosure. Environmentally sensitive investors are expecting a higher disclosure standard for the green-related performance of financial products so that they can make informed investment decisions. SFC also published guidance on enhanced disclosure for green or ESG funds on 11 April 2019.
As the Green Fund market is expected to grow, HKQAA developed the Green Finance Certification Scheme - Green Fund to respond to stakeholders’ needs and raise awareness of green initiatives in the fund market. HKQAA will also continue to support SFC’s Strategic Framework for Green Finance. The Scheme aims to encourage more investors from the fund market to support green projects and industries as well as organisations committed to making a contribution to the United Nations’ Sustainable Development Goals (SDGs).
Core Elements and Requirements of Certification
The Scheme extends from covering green bonds and green loans to green funds. In the development process, HKQAA is drawing reference from a number of widely-acknowledged and important documents.
The Scheme will apply the core methodologies of a measurable qualitative approach and adopt SDGs for assessing positive environmental impact. The core elements of the Scheme include Fund Objectives, Management of Fund, Green Asset Evaluation and Selection, Green Asset Monitoring, Information Disclosure and Reporting, and Engagement & Active Ownership.
The Scheme is designed to enhance the transparency of the green investment process by making clear to investors how the fund’s green assets are evaluated, selected and managed. Improving and aligning green disclosure standards across funds through marketing and educational efforts will support a more informed investment decision-making process, allowing investors to choose funds whose values align with theirs.
Types of Certification
The Scheme will issue two types of Certificates: Green Finance Pre-issuance Stage Certificate and Green Finance Post-issuance Stage Certificate. Management Company shall apply for different Certificates according to its fund status.
|
|
Pre-issuance stage certification
|
Post-issuance stage certification
|
|
Target
|
New Fund or Existing Fund
|
Existing Fund
|
|
Validity
|
As-at certificate (No expiry date)
|
Three year
|
|
Maintenance
|
Not necessary
|
Annual assessment
|
|
Objective
|
Validate the adequacy of the Environmental Method Statement
(Note: Requirements related to implementation are not applicable to this certification)
|
Validate the adequacy and verify the effectiveness of Environmental Method Statement
|
|
Assessment
|
Assessment will focus on the requirements related to establishing and documenting objective, mechanism
(including strategies, methodology, criteria if applicable), process and competence. Implementation record is not required for this stage.
|
Assessment will go beyond those covered in pre-issuance stage certification. Implementation record of mechanism, process, practice and demonstration on its objective and portfolio is also required for assessment.
|
Please click HERE for more information. To obtain the handbook for the HKQAA Green and Sustainable Finance Certification Scheme, please email to hkqaa.mkt@hkqaa.org.
Terms and Conditions of the Green and Sustainable Finance Certification Scheme.
|
